China’s Hottest Hot Pot Chain is Going Public

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Haidilao International Holding Ltd., one of China’s most popular hot pot chains, submitted its prospectus to Hong Kong Stock Exchange on May 17.

In its prospectus, Haidilao disclosed its total revenue in 2017 of 10.64 billion yuan ($1.67 billion) with an annual growth of 35.9%, and their profit of 1.19 billion yuan ($184 million) with an annual growth of 7.5%.

The revenue of Haidilao in the past three years
The revenue of Haidilao in the past three years

The revenue model of Haidilao is very straightforward: 97% of its total revenue from 2015 to 2017 came from their restraurants. In 2017 specifically, 97.6% came from the restaurant, while 2.1% came from its takeout business and 0.3% from selling seasonings and raw materials.

Gross revenue of Haidilao in the past three years
Gross revenue of Haidilao in the past three years

Haidilao ranks first among all Chinese food restaurants around the world in terms of revenue for 2017, according to the Sullivan report cited in its prospectus. Currently, Haidilao operates 296 hot pot restaurants in China and 24 overseas. The prospectus also disclosed that Haidilao serves more than 100 million customers annually.

use of founds
use of founds

The Chinese hot pot chains plan to use 60% of the funds from the IPO for its expansions, 20% for the development and implementation of new technologies and another 20% for loan payments and working capital.

Haidilao U.S. website
Haidilao U.S. website

Haidilao had been expanding rapidly in recent years with the number of restaurants doubling in the past three years. In its prospectus, Haidilao said it will open 180 to 220 new restaurants in 2018, which shows that financing may be the main reason for its application for IPO.

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